RE:RE:RE:RE:RE:RE:conversion of warrants/optionsThank you developbc for all the info.
I was not expecting such an hostile response from some posters.
I was not questioning why Peter is selling shares, I do understand and no one should question what he does with his well deserve money/bonuses.
As part of DD I needed to clarify the concept that by doing so, he is increasing his shares %, and you’ve done just that, thank you.
I sure many did not understand it all, an now they might.
I’d like to think that these board are to gather and exchange information and knowledge among each other, and not to automatically insult others.
Thanks again
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developbc wrote: I am just going to copy paste another response I did for another poster on ceo.ca. You are forgetting Pete does not need sell the exact amount of shares to options exercised. He is doing it in a very responsible manner to cover the execution of the share options and taxes(which are very significant w options and capital gain taxes of sales)
This was rough caculcation example I did previously where Andrew sold about 1/2 the amount of shares of new optioned shares:
To help illustrate CRA tax law/tax payable. In this case of Andrew exercising 250,000 options and selling 127,200 shares to cover taxes payable: A. Taxes Payable on Sale: 127,200 shares sold @ $8.01-8.21 equals $1,034,716 gross sale proceeds roughly $517,000 taxable gain thus roughly $260,000 tax payable on sale(don't have acb on hand so assuming minimal or insignificant). B. Taxes Payable Option Exercise: 250,000 option shares exercised Aug 6 w last day close rule Aug 5 deemed a taxable benefit of $1,987,500 @previous day mkt close $8.47 less option strike price cost base of $.52 gives a taxable gain 50% capital gain exemption of $993,750 - approx $500,000 tax payable due via option excercise. Therefore, $760,000 taxes are payable to CRA which is very significant. NOTE: These numbers are rough estimates for illustrative purposes. Often what many do strategically is shift shares into registered acct like tfsa and allow tax free growth. StairwayTo wrote: I’m pretty good at math, it’s the concept of options/warrants that I’m less familiar with.
In my example, if you exercise your option to buy 45,000 shares from the company’s balance sheet float and sell the same 45,000 shares to the market,
You haven’t increase your % shares holding, if anything, you increase the total outstanding shares to the open market and therefore reduced your %, doesn’t it?
Don’t worry, get home safe, maybe someone else has the answer.
Thanks again.
developbc wrote: Simple mathematics. I'm on the road now so not going to calculate for you but very simply as he needs to sell less shares to execute and cover all taxes..now the new greater # of shares via options increases his share count..which definitely does.
The % increase relative to his total share count is minimal bc his # of shares is so massive..but it definitely increases.
Long and strong PYROGENESIS
StairwayTo wrote: Yes thank you developbc, i do get this part, but how does it increase his control of % of the float as some say?
developbc wrote: StairwayTo wrote: I get that these options are some sort of bonus given to management or employees and that there have an expiry date, so of course they will all be exercised understandably.
And they can do whatever they want with the proceed, pay taxes on the gain, buy expensive things, save it etc…
What I don’t get is how some say that by doing so, Peter will increase its control or % of shares.
If you exercise 45,000 shares at $0.20 but sell it right back to the market, how does it increase your %.
Sorry, I’m missing this part of finance/trade, if someone could nicely explain it will be appreciated.
Peter will need to sell shares to convert the options strike price and huge tax bill for taxable benefits and capital gains of sale.
Long and strong PYROGENESIS!